CHINA’S SCORE­CARD

Finweek English Edition - - Offshore investments -

Some ran­dom mile­stones:

China’s for­eign ex­change re­serves have topped $1 tril­lion, while its trade sur­plus swelled 74% last year to a record US$177,5bn. • The value of the more than 1 400 com­pa­nies listed in China has more than dou­bled dur­ing the past year to $1 tril­lion, fu­elled by eco­nomic growth of 10%. China now ranks as Asia’s third­largest eq­uity mar­ket by cap­i­tal­i­sa­tion. China’s In­dus­trial and Com­mer­cial Bank of China (ICBC) re­cently over­took the Bank of Amer­ica to be­come the sec­ond-largest bank in the world. ICBC’s mar­ket value is around $251bn against the Bank of Amer­ica’s $245bn. Fifty-two over­seas in­sti­tu­tions, led by the Union Bank of Switzer­land (UBS), have re­ceived ap­proval to in­vest in main­land stocks and bonds. Aaron Boesky, who man­ages $40m in the only over­seas fund to in­vest solely in China’s do­mes­tic mar­ket, says de­mand is some­times so tight that “peo­ple fight with their fists to get an al­lot­ment of shares”. China’s Na­tional So­cial Se­cu­rity Fund (NSSF), which has as­sets of $300bn, re­cently awarded 10 for­eign fund man­agers hotly con­tested man­dates to in­vest more than $1bn in over­seas stocks and bonds. This is the first time it has hap­pened. Some 84 fund man­agers from around the world com­peted for th­ese pres­ti­gious man­dates. Two of the 10 win­ners are owned by Al­lianz, Ger­many’s big­gest in­surer, and two oth­ers are arms of Axa, France’s top in­surer. China has made prom­ises worth $1,6 tril­lion in to­day’s money for which it has made no pro­vi­sion. In­vest­ments in Chi­nese do­mes­tic mu­tual funds re­cently passed the $100bn mark for the first time. The fig­ure jumped 83% last year. Sav­ings bank de­posits to­tal $2 tril­lion. China now boasts the world’s largest mar­ket for fi­nan­cial in­stru­ments. Data com­piled by Gold­man Sachs shows that war­rant turnover on the Shang­hai and Shen­zen stock ex­changes reached about $240bn last year. Main­land prop­erty com­pa­nies sold $1,6bn in bonds last year, ac­count­ing for 84% of off­shore is­suance vol­umes from the main­land. The main­land’s hous­ing mar­ket is flour­ish­ing as an es­ti­mated 8m peo­ple flock to cities each year. In Bei­jing, the av­er­age res­i­den­tial prop­erty price per square me­tre is R8 500.

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